2004 Minnesota Statutes

     308B.605 Assignment of financial rights. 

    Subdivision 1.    Assignment of financial rights 
 permitted.  Except as provided in subdivision 3, a member's 
 financial rights are transferable in whole or in part. 

    Subd. 2.    Effect of assignment of financial rights.  
 An assignment of a member's financial rights entitles the 
 assignee to receive, to the extent assigned, only the share of 
 profits and losses and the distributions to which the assignor 
 would otherwise be entitled.  An assignment of a member's 
 financial rights does not dissolve the cooperative and does not 
 entitle or empower the assignee to become a member, to exercise 
 any governance rights, to receive any notices from the 
 cooperative, or to cause dissolution.  The assignment shall not 
 allow the assignee to control the member's exercise of 
 governance or voting rights. 

    Subd. 3.    Restrictions of assignment of financial 
 rights.  (a) A restriction on the assignment of financial 
 rights may be imposed in the articles, in the bylaws, in a 
 member control agreement, by a resolution adopted by the 
 members, by an agreement among or other written action by the 
 members, or by an agreement among or other written action by the 
 members and the cooperative.  A restriction is not binding with 
 respect to financial rights reflected in the required records 
 before the adoption of the restriction, unless the owners of 
 those financial rights are parties to the agreement or voted in 
 favor of the restriction. 

    (b) Subject to paragraph (c), a written restriction on the 
 assignment of financial rights that is not manifestly 
 unreasonable under the circumstances and is noted conspicuously 
 in the required records may be enforced against the owner of the 
 restricted financial rights or a successor or transferee of the 
 owner, including a pledgee or a legal representative.  Unless 
 noted conspicuously in the required records, a restriction, even 
 though permitted by this section, is ineffective against a 
 person without knowledge of the restriction. 

    (c) With regard to restrictions on the assignment of 
 financial rights, a would-be assignee of financial rights is 
 entitled to rely on a statement of membership interest issued by 
 the cooperative under section 308B.611.  A restriction on the 
 assignment of financial rights, which is otherwise valid and in 
 effect at the time of the issuance of a statement of membership 
 interest but which is not reflected in that statement, is 
 ineffective against an assignee who takes an assignment in 
 reliance on the statement. 

    (d) Notwithstanding any provision of law, articles, bylaws, 
 member control agreement, other agreement, resolution, or action 
 to the contrary, a security interest in a member's financial 
 rights may be foreclosed and otherwise enforced, and a secured 
 party may assign a member's financial rights in accordance with 
 chapter 336, without the consent or approval of the member whose 
 financial rights are subject to the security interest. 

    HIST: 2003 c 105 art 1 s 55